Advisers need to put aside a day a week NOW

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Experienced financial advisers need to be doing around eight hours study a week from now to pass education assessments and get authorised by December.

Friday, April 16th 2010, 6:27AM 2 Comments

by Jenha White

Advisers wanting to become Authorised Financial Advisers (AFA's) under the Financial Advisers Act 2008 have to either graduate with a National Certificate in Financial Services (Financial Advice) (Level 5) (NCFS-5) or achieve the equivalent educational outcome by December.

Chatswood Consulting principal Russell Hutchinson has developed a Working Plan for advisers in association with the PAA and ING which looks in detail at what advisers need to do over the next seven months.

The Working Plan has found that it will likely take between 94 and 636 hours to get authorised depending on levels of experience, previous qualifications and competence.

Hutchinson says the numbers were worked out by looking at NZQA guidelines which outline that every credit needs to be allocated 10 hours. This means someone with no previous knowledge of the financial planning doing NCFS-5 needs to get 50 credits and put aside 500 hours.

The plan also looks at the estimated time it will take to analyse your business, use the ETITO self-evaluation tool, prepare client files, join a disputes resolution scheme, register businesses and people, write an adviser business statement and apply for authorisation under the Financial Advisers Act 2008.

Hutchinson says most advisers getting authorised are experienced, so he estimates training to take half the time it would take an individual with no experience, or around 250 hours.

Applications for authorisation need to be sent to the Securities Commission by November to get approved by December, leaving just seven months for advisers to get organised.

That means reasonably experienced advisers, requiring 250 hours of training, need to put aside about 30 hours a month or eight hours a week to prepare for authorisation.

An adviser who is already very competent with an existing qualification may only need to do Standard Set B says Hutchinson.

That means to get the five credits they will need to do 50 hours of training as well as all the other work required to meet regulation, taking about 94 hours.

Hutchinson says these hours are like estimates on a road map for driving hours: they are on the conservative side, but give you some idea of how long it will take to get to the destination.

PAA chief executive Edward Richards says education is the number one priority.

He says there is a tendency to be complacent and he is surprised that only 800 advisers have used ETITO's self-evaluation tool so far.

"Advisers should be assessing their competence and how much training they need to get done now.

"2010 and 2011 are going to be the years of detail and advisers who are self-disciplined will do well," he says.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

Tags: Regulation

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